Goods and Services Tax (GST)
What it is:
A goods and services tax (GST) is a Canadian tax on goods and services for domestic consumption.
How it works (Example):
Like a sales tax, businesses collect the GST from customers when they purchase goods or services and then remit those taxes to the government. The GST was between 5% and 7% in 2011. Some provinces add the GST to their own provincial sales tax (this is called the harmonized tax), for combined totals of between 5% and 15% in 2011.
Certain goods and services are not subject to GST, certain businesses do not have to charge it, and people of certain ethnic descent or geographic location do not have to pay it.